The Importance of Carbon Reduction!
In line with the Paris Agreement to limit global warming to well below 2 degrees Celsius, preferably to 1.5 degrees Celsius, compared to pre-industrial levels. The New Zealand Government has committed to a conditional target to reduce New Zealand’s emissions to 50% below 1990 levels by 2050.
The Government has signalled that it will introduce a Zero Carbon Bill in late 2018 with a bold new emissions reduction target for 2050.
The adoption of the Zero Carbon Act in 2019 was a step forward, but implementation is key The Act aims to achieve net zero emissions of all greenhouse gases, except for methane emissions from agriculture and waste, by 2050.
With New Zealand’s renewable energy usage already at 84%, and 100% targeted by 2035, significant emission reductions would need to be achieved in other sectors, in particular through full decarbonisation of industry emissions by 2050.
Significantly reducing Carbon emissions will impact all businesses in some way or another, requiring a complete rethink in decisions, projects and the way we do business.
It is incumbent on businesses to take individual responsibility to reduce and manage their carbon emissions, and whilst there has been a lot of public positioning and, dare we say, self-promotion in tune with the regular media beat around the subject of Climate Change, real progress with regards to the curtailment of emissions is painfully slow.
Although much of the monitoring and reporting activity currently being taken by Industry is voluntary, we can expect to see policy makers take on a more serious and mandatory approach as the looming targets approach.
For a business to understand the amount of effort required to reduce its carbon emissions, they would first need to know what their current emissions are. A typical approach would be to develop a Carbon Inventory.
A Carbon Inventory provides a baseline from which a company can develop a reduction strategy and plan.
Like all inventories, a carbon inventory needs to be accurate and verifiable. Clearly articulating where emissions are released, how they have been quantified, what factors have been used and how they will be reported.
What is a Carbon Inventory?
At a highest level, a Nation produces a Carbon Inventory each year as part of its obligations under the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol.
These high-level inventories provide key evidence on greenhouse gas emission trends and inform policy recommendations on climate change. Enabling the monitoring of progress towards our emissions reductions targets.
At a more detailed level, a business may produce an inventory or require a department or project to produce a carbon inventory providing a detail account of its actual emissions or in the case of a planned project, an estimate of the emissions that will be released during both its implementation and later operation.
More detailed level inventories include:
Business inventory
Department inventory
Project carbon inventory providing a detail account of its actual emissions
Planned project may require an estimate of the emissions that will be released during both its implementation and later operation.
Information presented in a carbon inventory can help inform corporate strategies, project portfolios and prioritise actions to reduce emissions and provide benchmarks against which the success of these activities can be measured.
A Carbon Inventory is essentially a quantified list of all items that emit Greenhouse Gas.
The Greenhouse Gas Protocol defines emissions across three scopes i.e. 1-3:
Scope 1 - direct emissions occurring from sources that are owned or controlled by the company.
Scope 2 - emissions from the generation of purchased electricity consumed by the company.
Scope 3 - emissions that are a consequence of the activities of the company but occur from sources not owned or controlled by the company.
The most common used approach in industry today is using ISO 14064 which is an international standard for quantifying and reporting greenhouse gas emissions. The standard guides the development of a GHG inventory that can be compared to other inventories of other organisations regardless of sector or national origin.
ISO 14064-1 defines emissions across six categories rather than the three scopes of the GHG Protocol as described above.
A process of categorising the carbon emissions within each scope is then undertaken.
In its simplest form a Carbon Inventory for an organisation is a document that records the carbon footprint that a business/project has on the environment.
What is Carbon Inventory Quantification?
Inventory Quantification adopts standard methods for measuring and calculating the GHG emissions attributed to an Organisation. The Intergovernmental Panel on Climate Change (IPCC) provides the world’s most authoritative scientific assessments on climate change and provides guidance for greenhouse gas inventory arrangements and management, data gathering, compilation, and reporting.
To quantify and report GHG emissions, organisations need data about their activities (for example the quantity and type of fuel used). They can then convert this into information about their emissions (measured in tonnes of CO2-e) using emission factors.
An emission factor allows the estimation of GHG emissions from a unit of available activity data (e.g., litres of fuel used).
The basic calculation used to determine CO2-e is:
CALCULATION METHODOLOGY
This formula applies to the calculation of both CO2-e emissions and individual carbon dioxide, methane and nitrous oxide emissions, with the appropriate emission factors applied for F.
The preferred form of data is in the units that are expressed within emission factor tables, this results in the most accurate emission calculation. If the data cannot be collected in these nominated units, then conversion factors are applied leading to a less accurate quantification.
A basic organisational process map for collecting organisational data for quantification is set out below:
What is a Carbon Inventory Management Plan?
The GHG inventory management plan formalises the data collection, procedures and processes the organisation has adopted and which they will be benchmarked against.
This will also form the basis for the accounting principles and future audits.
What are GHG Accounting Principles?
Similar to financial accounting and reporting principles, GHG accounting principles are intended to underpin and guide GHG accounting and reporting to ensure that the reported information represents a true, and fair account of an organisation’s GHG emissions.
GHG accounting and reporting practices are continuing to evolve and are relatively new to most businesses. However, the principles listed below are specified in all international standards, specifically ISO14064-1, and are generally accepted and adopted by a wide range of stakeholders in technical, environmental and accounting disciplines.
For more information of the Greenhouse Gas protocol (or GHG protocol) ‘A Corporate Accounting and Reporting Standard” can be found here.
RELEVANT - Ensure the GHG inventory appropriately reflects the GHG emissions of the company and serves the decision-making needs of users – both internal and external to the company.
COMPLETENESS - Account for and report on all GHG emission sources and activities within the chosen inventory boundary. Disclose and justify any specific exclusions.
CONSISTENCY - Use consistent methodologies to allow for meaningful comparisons of emissions over time. Transparently document any changes to the data, inventory boundary, methods, or any other relevant factors in the time series.
TRANSPARENCY - Address all relevant issues in a factual and coherent manner, based on a clear audit trail. Disclose any relevant assumptions and make appropriate references to the accounting and calculation methodologies and data sources used.
ACCURACY - Ensure that the quantification of GHG emissions is systematically neither over nor under actual emissions, as far as can be judged, and that uncertainties are reduced as far as practicable. Achieve sufficient accuracy to enable users to make decisions with reasonable assurance as to the integrity of the reported information.
Like financial reporting, it’s not done once and forgotten about, rather the approach is to baseline the first year and then adopt a routine of measuring and monitoring the organisational performance. This allows early detection of any change in carbon footprint early on.
Siecap is certified to provide, impartial inventory auditing services, in accordance with ISO14065 and the GHG Protocol, Corporate Accounting and Reporting Standard:
ISO14064-1, design, develop, manage and report on an organisations GHG inventory.
ISO14064-2, Quantify, monitor and report emission reduction and removal enhancement on GHG projects or project based activities.
ISO14064-3, Specification with guidance for use for the verification and validation of GHG statements
Contact us to enquire about how we can assist you in getting your business ready for carbon emission reduction: